FOREWORD - DEFENCE MANAGEMENT JOURNAL, Issue 49

Rear Admiral (ret'd) Rees Ward

Recent coverage in the national press has rightfully placed defence high in the political and public consciousness. With all political parties promising a Strategic Defence Review (SDR), we are entering a crucial period that will fundamentally change the landscape for the future of the UK's defence and security industries.

Responding to this important challenge, A|D|S, the UK's trade organisation advancing the aerospace, defence and security industries, has released its defence and security manifestos, highlighting the support that is necessary for industries that will meet the needs of the armed forces and security services, sustain high value employment, and add the maximum contribution to the UK economy.

These industries are world class as evinced by the 21% and 7% shares of the global market respectively, and will be key components of the UK's recovery.

A clear priority for the government is to deliver an SDR and a refreshed Defence Industrial Strategy (DIS). Providing clarity and as much certainty as possible in an uncertain world around the future equipment and services programme will allow industry to make the right strategic investments with a clear government strategy in mind.

This direction, however, is only as good as the seed corn investment of the industry, namely research and technology (R&T). Most commentators agree that the recent 23% reduction in the MoD's R&T budget was a step too far. Restoration of that funding, which represents a tiny proportion of the overall budget, is necessary if the future first class products are to be developed in 5 to 10 years' time and industry's confidence in government investment is to be restored.

The equipment and services that our industry produce are rightfully respected throughout the world, and explain why the UK has maintained its position as the leading defence export nation in Europe – only second to the US with a 21% global market share for the past five years, contributing on average £5bn to the Balance of Payments and £35bn in value to the economy. However, Cabinet level support has frequently been lacking in a market that frequently sees countries, as well as companies,
competing for contracts – and this must change. To level the playing field, the industry needs the full and active
support from the Prime Minister, Foreign Secretary and Secretaries of State for both Business and Defence if it is to continue to be a wealth creator and the most reliable support for our armed forces.

Acquisition reform has also understandably been a hot topic. A|D|S has welcomed the recently published Defence Acquisition Strategy and looks forward to working with government to make it a reality.

The UK is also a nation of small business owners – and the defence industry hosts more small and medium-sized enterprises than France, Germany, Spain, Italy and Norway combined. The recent economic conditions have been difficult for this fragile yet vital part of industry, and we are committed to ensuring that this and future governments recognise the vital contribution that SMEs bring to defence and the economy, and provide the right level of support to maintain the bedrock of industry.

As one of the top three industries in the UK for returns on government investment, and with employment of over 300,000, the UK defence industry rightfully deserves to be recognised for the fiscal and security benefits it brings to the nation, and we are making sure that this message is heard.